Can I Get Insurance on a vehicle with a salvage title?

The answer is a resounding “Probably.” Yes, I know how much you hate answers like that, BUT Ohio auto insurance isn’t always black & white. Unfortunately there’s a lot of gray depending on the situation. So let’s take a deeper look at the process that leads to a salvage title in the first place AND how many auto insurance companies handle insuring vehicles with salvage titles.

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The path to getting a salvage title- Step 1- The accident

So let’s take a few steps back and start at the beginning. You’re involved in an accident and your vehicle is damaged. If the accident is your fault, then your policy would respond to fix your damage, provided you have comprehensive and/or collision on your policy (which one would respond would depend on the nature of the accident).

If the accident is someone else’s fault, then their policy would respond to pay for damages.

The path to getting a salvage title- Step 2- The claim settlement

Regardless of who’s at fault, the process is similar: the company adjuster reviews the estimate for repair and gathers information from a variety of resources to determine the actual cash value of the vehicle. IF the cost to repair is within a certain amount, or even percentage of the actual cash value (keep in mind this varies among insurance companies), then the adjuster will consider the vehicle a total loss and pay the value of the vehicle minus any applicable deductible.

The path to getting a salvage title- Step 3- Deciding to “buy back” the vehicle from the insurance company

Once the insurance company has made their payment, the vehicle is now theirs. Usually it’s sold to an auction or salvage yard and used for parts. The insurance company would keep the proceeds of that sale.  

In some cases, you may decide to keep the car. Maybe it’s for sentimental value or because it’s just a great car. But the choice is made to keep that vehicle. If this is the case, the insurance company will forgo that salvage yard process and turn the car over to you. You’ll be paid the actual cash value minus the amount the car would have brought at auction (salvage value). State law dictates whether or not you can buy back a vehicle once it’s declared a total loss- in Ohio you can.

Last step is applying for the salvage title via the BMV. Often, the insurance company will help guide you in this process, but you can visit the Ohio BMV website for additional information and document requirements.  

So, how do I get insurance on this vehicle with a salvage title?

As a general rule, most insurance companies will insure a vehicle with a salvage title (disclaimer: ALWAYS check with YOUR insurance company FIRST). The vehicle may only be eligible for certain types of coverage though.

For example, our carriers state that they will insure a vehicle with a salvage title, but ONLY for liability coverage. This means you cannot get comprehensive and collision coverage (which covers damage to the vehicle).

The reason is simple- if a car has a salvage title, then the insurance company knows it’s been badly damaged already. They don’t want to be on the hook insuring a car with existing damage and paying future claims as a result of that pre-existing damage. End of story.

So I can get liability coverage but no comprehensive and collision. How do I change that?

Luckily, there is a process to eliminate the salvage title and get a clean title issued. The Ohio State Highway Patrol must conduct an inspection of the vehicle to judge road-worthiness, verify ownership of parts and review all documentation. For more information and/or to schedule an inspection, you can visit the Vehicle Inspection Gateway.

When you pass the inspection, then they will furnish the proof you need to go to the BMV to get a regular title issued. You will need to complete additional paperwork for the BMV as well.

Once you have clean title in hand, then you can bring it to your insurance company to discuss the addition of comprehensive and/or collision to the vehicle. Keep in mind that insurance companies may have their own rules as to eligibility for comprehensive/collision BEYOND the salvage title issue. They may restrict based on age, for example. Double check with your company about the availability of comprehensive and collision coverage BEFORE you go through this process, as you may discover it’s not worth it.

The moral of the story…..

So, at least in Ohio (and that’s the only state we’re licensed in, so that’s all I care about ;), chances are good you can get insurance on a vehicle with a salvage title. BUT, the type of coverage you can get is probably going to be limited to liability only.  

When the vehicle passes the Highway Patrol Safety Inspection, THEN you can apply for a clean title (read, NON-SALVAGE). The last step would be to contact your insurance company to see about adding comprehensive and/or collision coverage to the vehicle.

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